Saudi Hollandi Bank today announced the successful closing of its first public, listed Sukuk of SAR 725 million. This issue follows the private placement completed at the end of 2008, further cementing SHB's position as the only bank in the the Middle East to raise Tier-II capital using a Shariah-compliant structure. Riyad Capital and Saudi Hollandi Capital acted as Joint Lead Managers and Bookrunners for this transaction.
A large number of investors expressed interest in the SHB Sukuk with total orders in the range of SAR 3 billion. The structure of this Sukuk involves Mudaraba over the Islamic banking business of SHB. The Sukuk is a Floating Rate Note (FRN) for ten years, with an option to call the issue after five years. The investors will receive a return of SIBOR plus 1.90% per annum to be distributed bi-annually. The pricing was finalised below the original price indication again demonstrating the success of the transaction.
SHB's Chairman, Engr. Mubarak Al-Khafrah, commented that the successful completion of the second Sukuk issue will grow SHB's capital and help it to achieve its strategic plans. The substantial demand for the Sukuk, leading to an oversubscription of more than four times, is further proof of the dynamism and resilience of the Saudi Arabian economy and financial markets, he added. Engr. Al-Khafrah also thanked SHB's Shariah Committee for their guidance and support in the Sukuk transaction.
Dr. Bernd van Linder, Managing Director of Saudi Hollandi Bank, expressed his delight with the successful completion of the transaction and thanked investors for their contribution to the success of the issue. Among the investors participating were Government Institutions, insurance companies, investment and money market funds and financial institutions. He also thanked Riyad Capital and Saudi Hollandi Capital for their diligent efforts in managing the transaction. Dr van Linder added that that the success of the Sukuk issue would support the further development of the Saudi Riyal debt capital markets.
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© Press Release 2010
